U.S. stocks rallied on Thursday as business productivity grew at the fastest pace in six years and applications for jobless insurance fell to a 10-month low, and Cisco Systems Inc gave an extra boost to the market after posting upbeat results.
Technology bellwether Cisco
We're seeing a great deal of strength this morning, with the catalyst being Cisco, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut. We came in with the market considered oversold so the news was likely to help.
U.S. non-farm productivity rose more than expected in the third quarter as companies squeezed more output from a smaller pool of labor, while fewer U.S. workers filed new jobless insurance claims than forecast last week -- hitting a 10-month low.
The rise in productivity is a reflection of companies cutting back on employees, and that's big savings, Goldman said.
He also said an increase in productivity can indicate the beginning stages of an economic recovery.
The Dow Jones industrial average <.DJI> gained 133.76 points, or 1.36 percent, to 9,935.90. The Standard & Poor's 500 Index <.SPX> rose 13.49 points, or 1.29 percent, to 1,059.99. The Nasdaq Composite Index <.IXIC> jumped 36.36 points, or 1.77 percent, to 2,091.88.
Shares of CVS Caremark Corp
U.S. retail chains reported October sales that rebounded from the lows of a year ago, but many failed to surpass Wall Street's boosted expectations as consumers spend selectively headed into the holiday season. The S&P retail index <.RLX> rose 0.5 percent.
(Editing by Jeffrey Benkoe)